[Introduced February 23, 2998; referred to the
Committee on Education; and then to the Committee on Finance.]

____________

A BILL to amend and reenact sections three, fifteen and sixteen,
article nine-d, chapter eighteen of the code of West
Virginia, one thousand nine hundred thirty-one, as amended,
all relating to the distribution of moneys by the school
building authority.

Be it enacted by the Legislature of West Virginia:
That sections three, fifteen and sixteen, article nine-d,
chapter eighteen of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, be amended and reenacted, all to
read as follows:

ARTICLE 9D. SCHOOL BUILDING AUTHORITY.

§18-9D-3. Powers of authority.
The school building authority has the power:
(1) To sue and be sued, plead and be impleaded;
(2) To have a seal and alter the same at pleasure;
(3) To contract to acquire and to acquire, in the name of
the authority by purchase, lease-purchase not to exceed a term of
twenty-five years, or otherwise, real property or rights or
easements necessary or convenient for its corporate purposes and
to exercise the power of eminent domain to accomplish those
purposes;
(4) To acquire, hold and dispose of real and personal
property for its corporate purposes;
(5) To make bylaws for the management and rule of its
affairs and to propose legislative rules for promulgation in
accordance with article three, chapter twenty-nine-a of this code
as may be required by the provisions of this article or as may be
necessary to carry out the provisions of this article;
(6) To appoint, contract with and employ attorneys, bond
counsel, accountants, construction and financial experts,
underwriters, financial advisers, trustees, managers, officers
and such other employees and agents as may be necessary in the
judgment of the authority and to fix their compensation:
Provided, That contracts entered into by the school building
authority in connection with the issuance of bonds under this
article to provide professional and technical services,
including, without limitation, accounting, actuarial,
underwriting, consulting, trustee, bond counsel, legal services and contracts relating to the purchase or sale of bonds are
subject to the provisions of article three, chapter five-a of
this code: Provided, however, That notwithstanding any other
provisions of this code, any authority of the attorney general of
this state relating to the review of contracts and other
documents to effectuate the issuance of bonds under this article
shall beis exclusively limited to the form of the contract and
document: Provided further, That the attorney general of this
state shall complete all reviews of contracts and documents
relating to the issuance of bonds under this article within ten
calendar days of receipt of the contract and document for review;
(7) To make contracts and to execute all instruments
necessary or convenient to effectuate the intent of and to
exercise the powers granted to it by this article;
(8) To renegotiate all contracts entered into by it
whenever, due to a change in situation, it appears to the
authority that its interests will be best served;
(9) To acquire by purchase, eminent domain or otherwise all
real property or interests in the property necessary or
convenient to accomplish the purposes of this article;
(10) To require proper maintenance and insurance of any
project authorized under this section;
(11) To charge rent for the use of all or any part of a
project or buildings at any time financed, constructed, acquired or improved, in whole or in part, with the revenues of the
authority;
(12) To assist any county board of education that chooses to
acquire land, buildings and capital improvements to existing
school buildings and property for use as public school
facilities, by lease from a private or public lessor for a term
not to exceed twenty-five years with an option to purchase
pursuant to an investment contract with the lessor on such terms
and conditions as may be determined to be in the best interests
of the authority, the state board of education and the county
board of education, consistent with the purposes of this article,
by transferring funds to the state board of education as provided
in subsection (d), section fifteen of this article for the use of
the county board of education;
(13) To accept and expend any gift, grant, contribution,
bequest or endowment of money to, or for the benefit of, the
authority, from the state of West Virginia or any other source
for any or all of the purposes specified in this article or for
any one or more of such purposes as may be specified in
connection with the gift, grant, contribution, bequest or
endowment;
(14) To enter on any lands and premises for the purpose of
making surveys, soundings and examinations;
(15) To contract for architectural, engineering or other professional services considered necessary or economical by the
authority to provide consultative or other services to the
authority or to any regional educational service agency or county
board requesting professional services offered by the authority,
to evaluate any facilities plan or any project encompassed in the
plan, to inspect existing facilities or any project that has
received or may receive funding from the authority, or to perform
any other service considered by the authority to be necessary or
economical. Assistance to the region or district may include the
development of preapproved systems, plans, designs, models or
documents; advice or oversight on any plan or project; or any
other service that may be efficiently provided to regional
educational service agencies or county boards by the authority;
(16) To provide funds on an emergency basis to repair or
replace property damaged by fire, flood, wind, storm, earthquake
or other natural occurrence, the funds to be made available in
accordance with guidelines of the school building authority;
(17) To transfer moneys to custodial accounts maintained by
the school building authority with a state financial institution
from the school construction fund and the school improvement fund
created in the state treasury pursuant to the provisions of
section six of this article, as necessary to the performance of
any contracts executed by the school building authority in
accordance with the provisions of this article;
(18) To enter into agreements with county boards and
persons, firms or corporations to facilitate the development of
county board projects and county board facilities plans. The
county board participating in an agreement shall pay at least
twenty-five percent of the cost of the agreement. Nothing in
this section shallmay be construed to supersede, limit or impair
the authority of county boards to develop and prepare their
projects or plans; and
(19) To do all things necessary or convenient to carry out
the powers given inconferred by this article.§18-9D-15. Legislative intent; distribution of money.(a) It is the intent of the Legislature to empower the
school building authority to facilitate and provide state funds
and to administer all federal funds provided for the construction
and major improvement of school facilities so as to meet the
educational needs of the people of this state in an efficient,
thorough and economical manner. The authority shall make funding
determinations in accordance with the provisions of this article
and shall assess existing school facilities and each facility's
school major improvement plan in relation to the needs of the
individual student, the general school population, the
communities served by the facilities and facility needs
statewide.
(b) An amount that is no more than three percent of the sum of moneys that are determined by the authority to be available
for distribution during the then current fiscal year from: (1)
Moneys paid into the school building capital improvements fund
pursuant to section ten, article nine-a of this chapter; (2) the
issuance of revenue bonds for which moneys in the school building
debt service fund are pledged as security; (3) moneys paid into
the school construction fund pursuant to section six of this
article; and (4) any other moneys received by the authority,
except moneys paid into the school major improvement fund
pursuant to section six of this article, may be allocated and may
be expended by the authority for projects that serviceserve the
educational community statewide or, upon application by the state
board, for educational programs that are under the jurisdiction
of the state board. In addition, upon application by the state
board or the administrative council of an area vocational
educational center established pursuant to article two-b of this
chapter, the authority may allocate and expend under this section
moneys for school major improvement projects proposed by the
state board or an administrative council for school facilities
under the direct supervision of the state board or an
administrative council, respectively: Provided, That the
authority may not expend any moneys for a school major
improvement project proposed by the state board or the
administrative council of an area vocational educational center unless the state board or an administrative council has submitted
a ten-year school major improvement plan, to be updated annually,
pursuant to section sixteen of this article: Provided, however,
That the authority shall, before allocating any moneys to the
state board or the administrative council of an area vocational
educational center for a school improvement project, consider all
other funding sources available for the project.
(c) An amount that is no more than two percent of the moneys
that are determined by the authority to be available for
distribution during the current fiscal year from: (1) Moneys
paid into the school building capital improvements fund pursuant
to section ten, article nine-a of this chapter; (2) the issuance
of revenue bonds for which moneys in the school building debt
service fund are pledged as security; (3) moneys paid into the
school construction fund pursuant to section six of this article;
and (4) any other moneys received by the authority, except moneys
deposited into the school major improvement fund, shall be set
aside by the authority as an emergency fund to be distributed in
accordance with the guidelines adoptedrules proposed for
promulgation by the authority.
(d) The remaining moneys determined by the authority to be
available for distribution during the then current fiscal year
from: (1) Moneys paid into the school building capital
improvements fund pursuant to section ten, article nine-a of this chapter; (2) the issuance of revenue bonds for which moneys in
the school building debt service fund are pledged as security;
(3) moneys paid into the school construction fund pursuant to
section six of this article; and (4) any other moneys received by
the authority, except moneys deposited into the school major
improvement fund, shall be allocated and expended on the basis of
need and efficient use of resources, the basis to be determined
by the authority in accordance with the provisions of section
sixteen of this article.
(e) If a county board of education proposes to finance a
project that is approved pursuant to section sixteen of this
article through a lease with an option to purchase leased
premises upon the expiration of the total lease period pursuant
to an investment contract, the authority may not allocate noany
moneys to the county board in connection with the project:
Provided, That the authority may transfer moneys to the state
board of education, which, with the authority, shall lend the
amount transferred to the county board to be used only for a one- time payment due at the beginning of the lease term, made for the
purpose of reducing annual lease payments under the investment
contract, subject to the following conditions:
(1) The loan shall be secured in the manner required by the
authority, in consultation with the state board, and shall be
repaid in a period and bear interest at a rate as determined by the state board and the authority and shall have such terms and
conditions as are required by the authority, all of which shall
be set forth in a loan agreement among the authority, the state
board and the county board;
(2) The loan agreement shall provide for the state board and
the authority to defer the payment of principal and interest upon
any loan made to the county board during the term of the
investment contract, and annual renewals of the investment
contract, among the state board, the authority, the county board
and a lessor: Provided, That in the event a county board, which
has received a loan from the authority for a one-time payment at
the beginning of the lease term, does not renew the subject lease
annually until performance of the investment contract in its
entirety is completed, the county board is in default and the
principal of the loan, together with all unpaid interest accrued
to the date of the default, shall at the option of the authority,
in consultation with the state board, become due and payable
immediately or subject to renegotiation among the state board,
the authority and the county board: Provided, however, That if
a county board renews the lease annually through the performance
of the investment contract in its entirety, the county board
shall exercise its option to purchase the leased premises:
Provided further, That the failure of the county board to make a
scheduled payment pursuant to the investment contract constitutes an event of default under the loan agreement: Andprovided
further, That upon a default by a county board, the principal of
the loan, together with all unpaid interest accrued to the date
of the default, shall at the option of the authority, in
consultation with the state board, become due and payable
immediately or subject to renegotiation among the state board,
the authority and the county board: And provided further, That
if the loan becomes due and payable immediately, the authority,
in consultation with the state board, shall use all means
available under the loan agreement and law to collect the
outstanding principal balance of the loan, together with all
unpaid interest accrued to the date of payment of the outstanding
principal balance; and
(3) The loan agreement shall provide for the state board and
the authority to forgive all principal and interest of the loan
upon the county board purchasing the leased premises pursuant to
the investment contract and performance of the investment
contract in its entirety.
(f) To encourage county boards to proceed promptly with
facilities planning and to prepare for the expenditure of any
state moneys derived from the sources described in this
subsection, any county board failing to expend money within three
years of the allocation to the county board shall forfeit the
allocation and thereafter is ineligible for further allocations pursuant to this subsection until the county board is ready to
expend funds in accordance with an approved facilities plan:
Provided, That the authority may authorize an extension beyond
the three-year forfeiture period not to exceed an additional two
years. Any amount forfeited shall be added to the total funds
available in the school construction fund of the authority for
future allocation and distribution.
(g) The remaining moneys that are determined by the
authority to be available for distribution during the then
current fiscal year from moneys paid into the school major
improvement fund pursuant to section six of this article shall be
allocated and distributed on the basis of need and efficient use
of resources, the basis to be determined by the authority in
accordance with the provisions of section sixteen of this
article: Provided, That the moneys may not be distributed to any
county board that does not have an approved school major
improvement plan or to any county board that is not prepared to
commence expenditures of the funds during the fiscal year in
which the moneys are distributed: Provided, however, That any
moneys allocated to a county board and not distributed to that
county board shall be deposited in an account to the credit of
that county board, the principal amount to remain to the credit
of and available to the county board for a period of two years.
Any moneys which are unexpended after a two-year period shall be redistributed on the basis of need from the school major
improvement fund in that fiscal year.
(h) No local matching funds may be required under the
provisions of this section. However, the responsibilities of the
county boards of education to maintain school facilities are not
negated by the provisions of this article. To be eligible to
receive an allocation of school major improvement funds from the
authority, a county board must have expended in the previous
fiscal year an amount of county moneys equal to or exceeding the
lowest average amount of money included in the county board's
maintenance budget over any three of the previous five years and
must have budgeted an amount equal to or greater than the average
in the current fiscal year: Provided, That the state board of
education shall promulgatepropose rules for promulgation
relating to county boards' maintenance budgets, including items
which shall be included in the budgets.
(i) Any county board may use moneys provided by the
authority under this article in conjunction with local funds
derived from bonding, special levy or other sources.
Distribution to a county board, or to the state board or the
administrative council of an area vocational educational center
pursuant to subsection (b) of this section, may be in a lump sum
or in accordance with a schedule of payments adopted by the
authority pursuant to guidelines adopted by the authority.
(j) Funds in the school construction fund shall first be
transferred and expended as follows:
Any funds deposited in the school construction fund shall be
expended first in accordance with an appropriation by the
Legislature. To the extent that funds are available in the
school construction fund in excess of that amount appropriated in
any fiscal year, the excess funds may be expended in accordance
with the provisions of this article. Any projects which the
authority identified and announced for funding on or before the
first day of August, one thousand nine hundred ninety-five, or
identified and announced for funding on or before the thirty- first day of December, one thousand nine hundred ninety-five,
shall be funded by the authority in an amount which is not less
than the amount specified when the project was identified and
announced.
(k) It is the intent of the Legislature to encourage county
boards to explore and consider arrangements with other counties
that may facilitate the highest and best use of all available
funds, which may result in improved transportation arrangements
for students, or which otherwise may create efficiencies for
county boards and the students. In order to address the intent
of the Legislature contained in this subsection, the authority
shall grant preference to those projects which involve multi- county arrangements as the authority shall determine reasonable and proper.

(a) To facilitate the goals as stated in section fifteen of
this article and to assure the prudent and resourceful
expenditure of state funds for construction projects as described
in subsection (d) of said section, each county board of education
shall submit a county-wide comprehensive educational facilities
plan that addresses the facilities and major improvement needs of
the county pursuant to such guidelines as shall be adopted
legislative rules proposed for promulgation by the authority in
accordance with this section and in accordance with each county's
facilities plan approved by the state board of education. Any
project receiving funding shall be in furtherance of such
approved county-wide facilities plan and any school included in
the approved county-wide facilities plan is eligible for funding
by the authority.
(1) To assure efficiency and productivity in the project
approval process, the county-wide facilities plan shall be
submitted only after a preliminary plan, a plan outline or a
proposal for a plan has been submitted to the authority.
Selected members of the authority, which selection shall include
citizen members, shall then meet promptly with those persons
designated by the county board to attend the facilities plan consultation. The purpose of the consultation is to assure
understanding of the general goals of the school building
authority as stated in subsection (a), section fifteen of this
article and the specific goals encompassed in the following
criteria and to discuss ways the plan may be structured to meet
those goals.
(2) The guidelinesrules for the development of a facilities
plan shall state the manner, timeline and process for submission
of any plan to the authority; suchthose project specifications
as may be deemedconsidered appropriate by the authority; and
those matters which are deemeddetermined by the authority to be
important reflections of how the project will further the overall
goals of the authority, as stated in subsection (a), section
fifteen of this article.
(b) To facilitate the goals as stated in section fifteen of
this article and to assure the prudent and resourceful
expenditure of state funds derived from the school major
improvement fund, each county board of education shall submit to
the authority a ten-year county-wide school major improvement
plan that addresses the major improvement needs of each school
within the county. If the state board of education or the
administrative council of an area vocational educational center
chooses to seek funding for a major improvement project from the
authority pursuant to subsection (f) of said section, the state board or such administrative council shall submit a ten-year
school major improvement plan that addresses the major
improvement needs of the school or area vocational educational
center for which funding is sought. Each ten-year school major
improvement plan shall be prepared pursuant to such guidelines as
shall be adoptedlegislative rules proposed for promulgation by
the authority in accordance with this section and shall be
updated annually to reflect projects completed and new or
continuing needs. Any school major improvement project funded by
the authority shall be in furtherance of such approved school
major improvement plan.
The guidelinesrules for the development and annual updates
of a ten-year school major improvement plan shall state the
manner, timeline and process for submission of any plan,
including a repair and replacement schedule for school
facilities, to the authority; suchthose maintenance
specifications as may be deemedconsidered appropriate by the
authority; and those matters which are deemeddetermined by the
authority to be important reflections of how the major
improvement project or projects will further the overall goals
of the authority, as stated in subsection (a), section fifteen of
this article.
(c) The guidelinesrules regarding submission of the
facilities plans and school major improvement plans shall include requirements for public hearings, comments or other means of
providing broad-based input within a reasonable time period as
the authority may deemconsiders appropriate. The submission of
each plan shall be accompanied by a synopsis of all comments
received and a formal comment by the county board, the state
board or the administrative council of an area vocational
educational center submitting suchthe plan.
The guidelinesrules regarding project specifications may
include such matters as energy efficiency, preferred siting,
construction materials, maintenance plan or any other matter
related to how the project is to proceed. If a county board of
education proposes to finance a construction project through a
lease with an option to purchase pursuant to an investment
contract as described in subsection (e), section fifteen of this
article, the specifications for such project shall include the
term of the lease, the amount of each lease payment, including
the payment due upon exercise of the option to purchase, and the
terms and conditions of the proposed investment contract.
(d) The guidelinesrules pertaining to quality educational
facilities shall require that a facilities plan address how the
current facilities do not meet and how the proposed plan and any
project thereunder does meet the following goals, which shall be
equally considered and weighted by the authority in making its
funding decisions:
(1) Student health and safety;
(2) Economies of scale, including compatibility with similar
schools that have achieved the most economical organization,
facility utilization and pupil-teacher ratiostaking into account
that population sparsity affects school sizes, transportation
times and costs;
(3) Reasonable travel time and practical means of addressing
other demographic considerations: Provided, That maximum
reasonable travel times are thirty minutes for kindergarten
through grade five, forty-five minutes for grades six through
eight and sixty minutes for grades nine through twelve;
(4) Multicounty and regional planning to achieve the most
effective and efficient instructional delivery system;
(5) Curriculum improvement and diversification, including
computerization, distance learning and other technology and
advanced senior courses in science, mathematics, language arts
and social studies;
(6) Innovations in education;
(7) Adequate space for projected student enrollments; and
(8) To the extent constitutionally permissible, each
facilities plan shall address the history of efforts taken by the
county board to propose or adopt local school bond issues or
special levies.
If the project is to benefit more than one county in the region, the facilities plan shall state the manner in which the
cost and funding of the project shall be apportioned among the
counties.
(e) The guidelinesrules pertaining to quality educational
facilities shall require that a school major improvement plan
address how the proposed plan and any project thereunder meet the
following goals set forth in subsection (d) of this section:(1) Student health and safety, including, but not limited
to, critical health and safety needs; and(2) Economies of scale, including regularly scheduled
preventive maintenanceProvided, That each county board's school
maintenance plan shall address regularly scheduled maintenance
for all facilities within the county.
(f) Each county board's facilities plan and school major
improvement plan shall prioritize all the construction projects
or major improvement projects, respectively, within the county.
A school major improvement plan submitted by the state board or
the administrative council of an area vocational educational
center shall prioritize all the school improvement projects
contained in suchthe plan. SuchThis priority list shall be one
of the criteria to be considered by the authority in determining
how available funds shallare to be expended. In prioritizing
the projects, the county board, the state board or the
administrative council submitting a plan shall make determinations in accordance with the objective criteria
formulated by the school building authority.
(g) Each facilities plan and school major improvement plan
shall include the objective means to be utilized in evaluating
implementation of the overall plan and each project included
therein. SuchThis evaluation shall measure each project's
furtherance of each applicable goal stated in this section and
any guidelinesrules adopted hereunder, as well as the overall
success of any project as it relates to the facilities plan or
school major improvement plan and the overall goals of the
authority.
(h) The state department of education shall conduct on-site
inspections, at least annually, of all facilities which have been
funded wholly or in part by moneys from the authority or state
board to ensure compliance with the county board's facilities
plan and school major improvement plan as related to suchthose
facilities; to preserve the physical integrity of the facilities
to the extent possible; and to otherwise extend the useful life
of the facilities: Provided, That the state board shall submit
reports regarding its on-site inspections of facilities to the
authority within thirty days of completion of such on-site
inspections: Provided, however, That the state board shall
promulgate rulespropose rules for promulgation regarding such
on-site inspections and matters relating thereto, in consultation with the authority, as soon as practicalpracticable and shall
submit suchthose proposed rules for legislative review no later
than the first day of December, one thousand nine hundred ninety- four.
(i) The authority may adopt guidelinespropose rules for
promulgation for requiring that a county board modify, update,
supplement or otherwise submit changes or additions to an
approved facilities plan or for requiring that a county board,
the state board or the administrative council of an area
vocational educational center modify, update, supplement or
otherwise submit changes or additions to an approved county board
facilities plan or school major improvement plan. The authority
shall provide reasonable notification and sufficient time for
suchany change or addition as delineated in guidelines developed
rules proposed for promulgation by the authority.
(j) Based on its on-site inspection or notification by the
authority to the state board that the changes or additions to a
county's board facilities plan or school major improvement plan
required by the authority have not been implemented within the
time period prescribed by the authority, the state board shall
restrict the use of the necessary funds or otherwise allocate
funds from moneys appropriated by the Legislature for those
purposes set forth in section nine, article nine-a of this
chapter.(k) In proposing rules for the distribution of school
building funds, as required under the provisions of this article,
the authority shall comply with all provisions relating to
legislative rules as set forth in article three, chapter twenty- nine-a of this code. Guidelines previously adopted by the
authority are invalid and without effect until such time as the
authority has proposed those guidelines as legislative rules and
the rules have been approved for promulgation by the Legislature.

NOTE: The purpose of this bill is to amend certain
provisions relating to the award and distribution of grant moneys
from the school building authority. It provides that county
school boards may spend authority moneys on any school that has
been included in an approved comprehensive educational facilities
plan; makes explicit that no one criterion, especially the
economies of scale, may dominate other statutory criteria when
decisions are made to award grant moneys; and requires the school
building authority to undergo legislative rule-making review and
have its guidelines approved as legislative rules.

Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.